Vietnam CEOs show confidence

Hanoi (VNA) – Business leaders in Vietnam are among the most
optimistic in Asia-Pacific.

They are more likely to increase investments over the next year compared to
CEOs in other Asia-Pacific Economic Cooperation (APEC) economies, according to
the APEC CEO survey in Asia-Pacific in the 2016-17 period conducted by the firm
PwC that focuses on audit and assurance, consulting and tax services.

Despute regional growth uncertainties, APEC CEOs continue to invest in
businesses and in economies across the region to seed future growth. Among
those with over-sight for markets in Vietnam, 76 percent expect to increase
investments over the next year, against 53 percent of CEOs who are likely to
invest across APEC.

This report reflects the perspective of 54 business leaders in Vietnam compared
to all 1,154 ones (APEC CEOs) surveyed from May to July 2016.

For seven years, as Knowledge Partner to the APEC CEO Summit, PwC has conducted
this survey to sharpen understanding of what’s driving business growth and
investment in the region. Over half of all respondents are in organisations
with more than 1 billion USD in annual revenue.

Vietnam’s central position in evolving regional trade projects further adds
support to its growth prospects, according to the survey, adding that the
Tran-Pacific Partnership, for one, is widely expected to boost exports,
although implementation seems less certain than it did a year ago.

CEOs in Vietnam are more likely to see significant progress toward the goal of
free trade in Asia Pacific compared to CEOs in the US or Japan, and consider lower-cost
skilled labour a major force driving regional economic integration.

While economists expect GDP growth to moderate somewhat this year, Vietnam
remains among the fastest growing in the region. The economy is drawing record foreign business investment. A market of over 90 million people, rapid middle-income growth and
openness to foreign ownership combine to boost its attractiveness. The CEOs are most confident in attaining
higher margins from domestic operations.

Some 33 percent of CEOs is more confident about launching a new product or
service or entering a new line of business, 41 percent of CEOs believe in
increasing profits margins in domestic operations, while 19 percent are less confident
about increasing profits margins in international operations.

Johan Nyvene, CEO of Securities Corporation in HCM City, said Vietnam would
benefit from the growing integration of regional economies. The growth rate in
other countries in the region had probably reached a plateau, which will require
them to invest beyond their borders.

“Thus in many cases, Vietnam is not only a destination for investors from
developed countries, but also for investors from Thailand or Indonesia,” Johan
said.

On average, APECT business leaders are investing in seven other APECT
economies. This is the competitive arena that matters most, reflected in the
rise of global foreign direct investment in 2015. Business investment capital
is pushing across borders to accelerate growth and as a result, often bumping
into fresh regulatory issues.

CEOs today say they balance policy and market factors in cross-border decisions.
These perspectives suggest cross-border business investment will increasingly
flow to the right regulatory conditions for business expansions, according to
the survey.

The survey indicates that the Internet of Things (IoT) is opening up new
business models and forging new and closer relationships, with customers and
supply chain partners.

“Over the next three years, there will be more APEC companies deploying IoT technology
than those which aren’t. The twin aims to facilitate free trade of data – and keeping
that data secure – will likely persist as jurisdictions grapple with keeping
laws, and regulations on cross-border data transfers in step with, or ahead of,
IoT advancements and wider adoption of the technology,” the report said.-VNA